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Innovation has become a staple for the Italian securitization market, almost de rigueur. This is not due to some exploited loophole, but rather a result of pro-securitization legislative regime, which might explain why Italy is rapidly taking the market lead. According to Commerzbank, the latest Italian innovation - the country's first whole business deal - raised over the equivalent of $2.5 billion.
At first glance, the Romulus Finance whole business securitization of Aeroporti di Roma (ADR) may look similar to whole business transactions that have grown out of the seasoned U.K. - regulated sector - and that's precisely the allure. "The greatest accomplishment of the ADR transaction is that it showed that a technique that the industry recognized in the U.K. could be applied to Italy," said David Bickerton at Clifford Chance, the legal advisor on the deal.
The structures are similar in that the obligations of a borrower with a stable, regulated cash flow under a secured loan agreement are the assets being securitized. In the Italian deal, however, the secured loan must already be in existence "The securitization...